Briefing for Bankers and bonuses: What has the City ever done for London?

Time and location

Monday 4 October 2010 from 18:30 to 20:00. (The  Conference Centre bar will be open from 17:30 and here won’t be drinks afterwards.)

Location: British Library Conference Centre, 96 Euston Road, London NW1 2DB

Please can you arrive at the Conference Centre for 18:00. Look for anyone from the Story of London Festival. Ask for us at registration and we will introduce you to your fellow speakers and your chair, and pass on any final updates.

Event on Story of London Festival site.

All debates Future City Keynote Debates

  • Bankers and Bonuses: What has the City ever done for London? on the evening of Monday 4 October
  • Is London growing too big too fast? on the evening of Tuesday 5 October
  • London and the Olympics: Predicting the legacy of the twenty-first century on the evening of Wednesday 6 October
  • Is London missing out on the potential of new technologies? on the evening of Thursday 7 October
  • London and the future: Will we still be a major player in the world in 2050? on the evening of Friday 8 October

More information and booking: Future City

Themes of The Story of London festival

  • Future of London
  • Innovation
  • How we can learn from the past

Themes and questions for this debate

  • What are the roots of the financial crisis?
  • Are bonuses for bankers the real problem?
  • What implications does the crisis have for London?
  • How fundamental is the city to the stability of the economy?
  • What role regulation (formal and informal)?
  • What functions does the city play which are not necessarily that apparent?
  • Trends in the global economy and forecasting, scenario planning?
  • Should banking and industry be closer together?
  • What role should venture capital play in the economy?
  • Should we be distributing capital to the English regions? (Billy Bragg)
  • Can the banks fuel innovation and growth? And are there examples in the past where this has happened?
  • What is the future for the banking sector and the City?
  • How does this fit with the Big Society agenda?


Since the establishment of the Royal Exchange in 1565, London has grown rich from its status as an international banking centre. The promisory note and the cheque were invented here, and the Bank of England, created in 1694 made possible the creation of the Royal Navy, which expanded the British empire throughout the eighteenth and nineteenth centuries. London’s maritime connections brought foreigners to these shores, and the creation of new culture institutions like the British Museum. In the 1990s, the deregulation of the City of London boosted the financial services, making them Britain’s number one industrial sector. Innovations in finance have facilitated innovation across society. Increased wealth has subsidised our cultural sector, boosted philanthropy, and financed new areas of Government. But recent events and the backlash against bankers raises important questions. Can banks return to their role of supporting innovation to fuel the growth of London? Have we become too reliant on banks? Should we curb their power? Would London be better off with a smaller financial sector?

John Micklethwait, editor-in-chief, The Economist


John Micklethwait is Editor-in-Chief of The Economist. Before that he edited the US section of the newspaper (1999 – 2006) and ran the New York Bureau for two years, having edited the Business Section of the newspaper for the previous four years. His other roles have included setting up The Economist’s office in Los Angeles, where he worked from 1990 – 1993 and being Media Correspondent. He has covered business and politics from the United States, Latin America, Continental Europe, Southern Africa and most of Asia. He is a frequent broadcaster and has appeared on CNN, ABC News, BBC and NPR. He is the co-author of “The Witch Doctors”, “A Future Perfect: the Challenge and Hidden Promise of Globalisation” and “The Company: A Short History of a Revolutionary Idea” and “The Right Nation”, a study of conservatism in America, with Adrian Wooldridge, also an Economist journalist.

Daniel Ben-Ami


Daniel Ben-Ami, financial journalist and author of Cowardly Capitalism: The Myth of the Global Financial Casino and Ferraris for All.

Daniel Ben-Ami has been a journalist for over 20 years, during which time he has contributed to numerous national and specialist publications, including the Financial Times, the Guardian, the Independent, Prospect, the Sunday Telegraph and the Sunday Times. He edits Fund Strategy, a specialist weekly magazine on investment funds and financial markets, where he also write a blog on economics, and is a regular contributor to spiked. He appears on radio and television, including BBC Radio 2, BBC Radio 4 (Thinking Allowed, the Today programme and the Moral Maze), BBC Radio 5 Live, News 24, BBC World, Bloomberg TV, CNBC, CNN and Sky News. His book on global finance, Cowardly Capitalism (2001), argues that the financial markets are characterised by risk aversion rather than the aggressive risk taking generally assumed, and his book Ferraris For All (2010) defends economic progress.

Point of view for this debate

  • It is quite difficult to avoid the greedy bankers debate – this is going to occur. Vince Cable’s speech last week showed that.
  • The thrust of the book Cowardly Capitalism is that financial institutions have become too preoccupied with risk management and not enough with growth capital. They have been too focused on risk aversion and not enough on allowing things to grow.
  • Mainstream view of relative importance of City to economy will decrease.
  • Still possible to make money from financial services, but it will become less important.
  • Should we regulate banks more? Not against regulation per se. Adair Turner, head of FSA, was talking as if the City of London is largely unregulated which is bizarre. The idea of unregulated finance is a myth – finance is highly regulated, not in the same way as the past, mid 80s was a turning point. London was regulated as an old boys club before then, you were booted out of the club if you behaved badly. Now it’s much more formalised, extensive form of regulations – there are lots of rules you have to conform to.
  • Have you got ideas around how banks would facilitate innovation? In the past they would raise capital from one person (saver) lend it to another (borrower). It’s become much more about managing risk.
  • Demands some sort of cultural shift as it’s a shift to a culture of risk aversion in society, the financial system is not doing this in isolation, in broader demand to get rid of risk
  • What are the negative aspects to risk aversion? It’s the risk paradox – it can make things less stable and more risky
  • Lehman Brothers – simple morality tale but look more closely and it’s risk management dynamic.
  • Mortgage – banks doing the lending sold them to Lehman, etc, to get them off their books. It’s about risk management.

Billy Bragg


Billy Bragg is a well-known writer and musician who came to prominence in the early 80s in a period encompassing recession, mass strikes, the Falklands War, and the beginnings of Thatcherite economic policy. In recent years he has promoted tactical voting, proposed democratic reform for the House of Lords, and has developed an interest in English national identity. In January 2010 Bragg announced that he would withhold his income tax in protest at the Royal Bank of Scotland’s plans to pay substantial bonuses. He told a crowd at Speaker’s Corner: ‘Millions are already facing stark choices: are they willing to work longer hours for less money, or would they rather be unemployed? I don’t see why the bankers at RBS shouldn’t be asked the same.’

Point of view for this debate

  • For responsible capitalism rather than the free market solving all the problems.
  • Growth working for everybody.
  • People after the War felt they were inter-connected and had responsibilities between the rich and poor. Wealth doesn’t trickle down.
  • Short term investment problem. 20th century will be accountability. Why have we become short-term? Because we want the money now.
  • See Terry Smith blog on investment in Warren Buffett’s Berkshire Hathaway company in 1964 would be worth less than if invested in hedge funds.
  • See the trajectory of Dagenham, where I grew up, from a place of manufacturing, focused on Ford, to today.
  • Whither London’s economy? Spread the wealth around. Devolve it to the rest of the country.
  • More taxes and less cuts, more redistribution. Laws that act like speed cameras for financial sector.

Listen also to the debate on the Today programme Listen Again page, trailed as ‘Is the British economy far too reliant on financial services? Author Billy Bragg and entrepreneur Luke Johnson debate whether City workers are heroes or villains’

Luke Johnson, entrepreneur and chairman, Risk Capital Partners


Luke Johnson is chairman of Risk Capital Partners, a private equity house and an entrepreneur focused on the restaurant business. He was chairman of PizzaExpress from 1993 to 1999, founded Signature Restaurants (which owns The Ivy, Le Caprice and the Belgo chain), as well as the Strada restaurant chain. He is currently part-owner and chairman of Superbrands, Giraffe Restaurants, Patisserie Valerie and Baker and Spice. Johnson was chairman of Channel 4 from 2004 to early 2010.  He writes a weekly column on entrepreneurship in the Financial Times, and wrote a weekly column on business matters for the Sunday Telegraph for eight years until 2006. In 2008 he was appointed chairman of the Royal Society of Arts, and was a governor of the University of the Arts London between 2000 and 2006.

Point of view for this debate

  • Would not demonise the banks or try and diminish them but like to see them devote more towards UK innovation.
  • My perspective is mixed in that I’m not an unquestioning apologist for the City of London
  • The City has had huge success overall to the wealth and prosperity of London
  • Saturday FT revealed that £500m of tax revenues have been lost with hedge funds leaving London
  • It is short sighted to focus on knee-jerk legislation after the horse has bolted
  • The roots of the credit crisis and recession aren’t about London at all – the four banks that needed saving, Bradford and Bingley, Northern Rock, Royal Bank of Scotland, not based in the City, they are located in Edinburgh. It’s a slightly specious point but brings home it’s a lot more complicated than people think
  • Banks not perfect – they enjoy implicit guarantee from taxman.
  • In my experience as a backer and entrepreneur, I have noticed a huge shortage of lending right now. It has collapsed: there’s no money. And this is not just because they are funding derivatives. This shouldn’t remain as it is currently structured.
  • Biggest single message is that the banks are far from perfect but bashing people because they get bonuses will lead to impoverishment. It won’t lead to enterprise and job creation that we need to revive the economy.
  • If we rigidly legislate the London economy will suffer, organisations will emigrate, expertise and world leadership will be lost, our standard of living will suffer. Leveling ourselves down. Banks didn’t force people to borrow money!
  • Can the banks return to funding enterprise and innovation? It’s very difficult to have a straight answer to this.
  • In favour of splitting up the banks: those that take deposits should be viewed differently to the ones that behave as casinos
  • Level market place so disproportionately heavy-handed legislation then that will disadvantage
  • People perhaps don’t realise how unbelievably important the City is to the economy – it’s so important to the hospitality sector for example.
  • The past role of innovation in London capital – was there a closer/better relationship between capital and manufacturing in the past? The City is very good at adapting. It will be good at finding places for growth. It funded US growth in the 19th century, funding mining in Russia today. Six of the top law firms are in London, and we have world leadership in law, it’s very profitable service to sell. We can’t be cost competitive with India and China.
  • We have to play to our strength, rather than reinvent according to diktat from government ministries. We should compete where we can (as long as it is legal).
  • London continues its role as a service provider – these are areas that we have strengths in and we should capitalise on that.
  • The UK is favoured as it doesn’t have much corruption.
  • Could banks play a more advisory role? Mundane industry hasn’t excited them enough. They are not geared towards fostering innovation in industry and and they should be encouraged and incentivised to do this. Would like to see them devote more to UK innovation.
  • Is launching Institute of Entrepreneurs think tank – remit is to promote entrepreneurship.
  • Entrepreneurship is the only way forward. Is more important than it’s ever been – it’s the single answer, entrepreneurs to innovate new companies and new jobs. Established companies don’t create new jobs and don’t innovate.
  • Philanthropic giving – lends a positive view to bankers. Funding for the arts is a small visible of an example of how they spread the wealth.
  • Arts organisations don’t have much choice – if you reject funds from the City of London, you’re rejecting two-thirdss of the soft money available that the arts and other organisations need.
  • If you shut down the City, the economy would collapse in a week. The taxes and high paying jobs that support the City not just a pillar but they are the pillar supporting the economy.
  • Plenty of innovative small firms, contribute a disproportionate amount of the innovation in the city.

Lord Layard, Emeritus Professor of Economics, Centre for Economic Performance, London School of Economics and Political Science

Biography[email protected]

Point of view for this debate

There has to be a radical change and a slimming down and a focus on production rather than on trade and excessive turnover [check].

Chair: Paul Mason, economics editor, BBC Newsnight


He joined the programme in 2001 as business and industry correspondent, a role which broadened to include covering gun crime in Croxteth, Hurricane Katrina in New Orleans and the papal accession race from the slums of Lagos, Nigeria. He took over as Economics Editor in 2008 with a brief to cover an agenda that he sums up as: “profit, people and planet”. Before joining Newsnight, Paul was deputy editor of Computer Weekly, a campaigning magazine whose investigative team regularly creates waves across government and industry. He spent a total of nine years covering business in specialist magazines and newspapers before making the move into TV. Prior to becoming a journalist Paul was a professional musician and lectured at Loughborough University of Technology.

He was born in 1960 in Leigh, Greater Manchester. He was educated at Thornleigh Salesian College, Sheffield University and London University.

Paul won the 2003 Wincott Award for business journalism for reports from China covering the economic and political transition there; was named Workworld Business Journalist of the Year in 2004 and won the Diageo African Business Reporting Award 2007 for his acclaimed film on how mobile phones are changing Africa. Beyond Newsnight Paul has authored a book on the history of the global labour movement and the Radio Four series “Spinning Yarns”, a highly personal account of the history of the cotton industry in his home region of Lancashire. Paul’s blog for Newsnight is called “Idle Scrawl”, and has recently adopted the Chinese co-title “Xian Ren San Ji” in acknowledgement of its growing audience in China.

Format and presentations

We would like you to prepare introductory remarks to be presented in five minutes.

After the introductions there will be a short panel debate lead by the chair, and the discussion will then be opened to the audience for questions and points. We hope we will have more than half an hour for this element of the event.

As time will be very limited, we will not be asking for visual presentations, except where visuals are necessary to support an introduction. (If you do want to present we check with the AV staff at the British Library that your presentation will work, and if your time allows work with you on your presentation.)

Marketing and promotion

Online advertising for the Festival has already started. On 23 September the printed guide will be distributed with Time Out (75,000 copies). On 25 September the guide will be included with the Saturday Guardian (230,000 copies). This will be followed by a Tube poster run, and a large screen Tube platform advertising campaign.

If you want to share information about the event or promote it you can use the following text:

Future City: Bankers and Bonuses: What has the City ever done for London?, 4/10 (British Library) #StoryofLondon

The Mayor’s Story of London Festival 2010 #StoryofLondon

The Twitter handle for the Festival is @StoryofLondon. The hashtag for debate Tweets is #FutureCity and the hashtag for the Future City debates is #StoryofLondon

There is also a Facebook page for the Story of London.


The event may be filmed or otherwise recorded. We may ask you if you will allow us to use these recordings for event documentation.


If you have travel or other expenses please keep your (dated) receipts and we will arrange for you to be reimbursed.


Nico Macdonald:
+44 7973 377 897

Laura North:
+44 77 7924 0556

[email protected]